When Accountable Care Organizations (ACO) were in the planning stages, many likened the evolution of the ACO to a mythical unicorn. Some said that ACOs may be even more mysterious than unicorns. The unicorn has disappeared (except in North Korea – look at this link) and it has been replaced by the ACO.

How many of you have read all 2,029 pages of the Patient Protection and Affordable Care Act (PPACA)? I sure haven’t. Don’t get me wrong, I’ve researched numerous studies, documents, scanned through the actual law and rules. I have a reasonable understanding of the new healthcare reform act and the upcoming changes getting ready to be unleashed over the course of the next few years.

The new PPACA has 598 provisions. One specific provision, which will have a dramatic effect on the way consumers receive their healthcare services and how providers will deliver and administer their services. Section 3022 of the Affordable Care Act contains the provision allowing Accountable Care Organizations (ACO) to be established.

According to the web site, Healthcare.Gov, an ACO is defined as a group of health care providers that give coordinated care, chronic disease management, and thus improving the quality of care a patient receives.

The healthcare organization’s payment is tied to achieving healthcare quality goals and outcomes set by the Department of Health and Human Services (HHS). If healthcare providers administer quality coordinated care that meets the quality standards set by CMS, the result is expected to create a healthcare system, which delivers better overall consumer health, improved care and lower costs not only for Medicare beneficiaries, but also for all Americans.

We all hope so; however, we know that hope is not a strategy. HHS and the Centers for Medicare & Medicaid Services (CMS) have invested significant resources to ensure success of the ACO program. We are all invested in the ACO’s success, regardless if we are constituents, patients, providers or government officials.

How do providers become an ACO? Some of the key requirements are:

– They must consist of professionals in group practice or hospital arrangements, networks of individual practices, partnerships or joint venture arrangements.
– They must enter into an agreement with the Secretary of the Department of Health and Human Services to participate in the program for not less than a 3-year period
– They must have at least 5,000 Medicare beneficiaries assigned to the ACO
– They must implement reporting systems, which monitor quality of care, and clinical and administrative processes, which promote evidence-based medicine and patient engagement, quality delivery systems, measure overall cost, while coordinating care through new technology platforms such as telehealth, remote patient monitoring, and other enabling technologies.

ACOs will be monitored by the HHS to make sure that it has the proper mechanisms in place to assess the quality of care that it produces. Quality measures must include:

– Clinical processes and outcomes
– Patient and caregiver experience of care
– Utilization data such as hospital admissions for ambulatory care
– Submit data to HHS to report progress and evaluate the quality of care

HHS’s requirements for quality of care will follow a schedule, which will become more stringent over time, creating higher standards and new measures to assess the quality care provided to beneficiaries. A voluntary Medicare Shared Savings Program (MSSP) will be initiated so doctors, hospitals, and other healthcare providers can improve their ability to coordinate care across all health care settings. Providers who meet certain quality standards can share in any resulting MMSP savings from the operation of the ACO.

In order to maintain good standing with CMS, ACOs must comply with 144 regulations and meet the 33-quality performance thresholds to be eligible for shared savings. Quality measures are broken into four domains:
– Patient/caregiver experience
– Care coordination/ patient safety
– Preventive health
– At-risk populations

The ACOs quality performance standards will be measured by several tactics. Seven measurements will come from patient surveys; three will be calculated by claim’s data, 1 via electronic health record (EHR) incentive program and 22 by the Group Practice Reporting Option (GRPO) web interface. All required reporting must comply with CMS standards and be delivered by an approved electronic or EMR system.

There is a lot at stake for ACOs to be successful. The CMS shared savings program mitigates some of the risk; however, there are no guarantees that all ACOs will experience success. The overarching goal of an ACO is to create an environment where coordinated care for healthcare services provided to patients improves outcomes and encourages the ACOs to make investments in infrastructure and reinvent the delivery of care.